As a financial broker, we understand the unique challenges faced by small firms, especially those established as private companies. Often, the directors are not only the key decision-makers but also the main shareholders. One of the biggest risks to the success of your business is the unexpected death of a co-director. This unfortunate event can cause major disruptions for the surviving directors and the deceased’s estate. However, there are effective solutions to mitigate these risks and ensure the continuity of your business.
Key Person Cover
Key Person Insurance is a vital safeguard for any business. This life insurance policy is taken out by the company on the life of a key individual, such as a director or top executive. In the event of their death, the company receives the death benefit. This financial cushion can be used to cover the costs of finding and training a replacement, paying off debts, or even closing the business if necessary. It ensures that the business can continue to operate smoothly during a difficult transition period.
Co-Directors Insurance or Company Buy Back Insurance
Co-Directors Insurance, also known as Shareholder Protection Insurance, is designed to provide funds to buy back shares from the estate of a deceased director. This ensures that the remaining directors retain control of the company and prevents the shares from being sold to an outside party. Typically, this insurance is set up as a level term protection plan, with policies arranged under trust to ensure the proceeds are used to buy back the deceased's shares. This solution helps maintain the stability and ownership structure of your business.
Executive Income Protection
Executive Income Protection is tailored to protect the income of key employees or directors if they become ill or injured and are unable to work. This insurance pays a monthly benefit to the business, which can be used to fund the employee's ongoing sick pay, covering up to 80% of their income, including dividends. This helps ensure financial stability for both the employee and the business during challenging times, allowing the business to continue operating without financial strain.
Executive Term Assurance
Executive Term Assurance provides a lump sum payment to the family of an executive employee if they die while still employed. This type of insurance is usually set up and paid for by the employer, and the premiums often qualify for tax relief. The lump sum can help the family cope financially in the absence of the employee's income, providing peace of mind and financial security during a difficult period.
Conclusion
These insurance solutions are essential for protecting your business and ensuring its continuity in the face of unforeseen events. We are here to help you navigate these options and find the best coverage for your specific needs. Don't leave your business's future to chance—invest in the right insurance solutions today.
If you have any questions or need further assistance, get in touch.
(01) 513 87 10
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